Cognitive Skills and Intra-Household Allocation of Schooling

Using household data from two districts in northern Ghana, this study examines how cognitive skills affect the allocation of schooling across the children of a household. The analysis reveals that relative to the rest of the siblings in the household, an increase of one standard deviation in the score of cognitive tests increases by 0.128-0.178 the number of years of schooling attended in the following three years, depending on the cognitive test used. These results are interpreted as empirical evidence for the main prediction of the theoretical model for intra-household allocation of resources developed in the seminal paper A Treatise on the Family (Becker, 1981): parents reinforce cognitive differences between siblings through allocating more human capital resources to the more able siblings. The study also explores whether the effect of cognitive skills on the allocation of schooling across siblings depends on the gender of the child or on household level characteristics. On the one hand, I find weak evidence suggesting that the effect of cognitive skills on schooling investments seems larger for boys than for girls although the results are not conclusive. On the other hand, the analysis suggests that polygyny, household size and household wealth do not affect relevantly the magnitude of this effect.